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Research & Evidence-Based Practice Flashcards

7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Research & Evidence-Based Practice flashcards as text

  1. A financial planner uses a risk tolerance questionnaire that consistently produces the same scores when administered to the same client one week apart. This property is called:

    Answer: Test-retest reliability

    Test-retest reliability refers to the consistency of a measure when repeated on the same subjects under the same conditions over time.

  2. A CFP practitioner discovers that a frequently cited study on retirement readiness used a convenience sample of college-educated respondents. The biggest threat to applying this research broadly is:

    Answer: Low external validity (limited generalizability)

    A convenience sample of a homogeneous group threatens external validity because findings may not generalize to the broader, more diverse population.

  3. In Bayesian reasoning applied to financial planning, the 'prior probability' refers to:

    Answer: The initial probability estimate before incorporating new evidence

    In Bayesian reasoning, the prior probability represents beliefs or estimates established before new evidence is incorporated.

  4. A financial planning researcher wants to measure 'financial well-being.' Since this is a theoretical construct, the researcher must establish which type of validity?

    Answer: Construct validity

    Construct validity ensures that a measurement instrument actually measures the theoretical construct it is intended to measure.

  5. A planner reads a study with a very narrow 95% confidence interval around its primary estimate. This narrow interval suggests:

    Answer: High precision in the estimate due to a large sample size or low variability

    A narrow confidence interval indicates high precision in the estimate, typically resulting from a large sample size or low variance in the data.

  6. Which of the following is an example of 'anchoring bias' affecting a financial planner's interpretation of research?

    Answer: Over-relying on the first piece of information encountered when assessing study quality

    Anchoring bias causes individuals to rely too heavily on the first piece of information encountered (the 'anchor') when making subsequent judgments.

  7. A study surveys 10,000 randomly selected US households about their savings habits using a validated instrument. The results show a strong correlation between financial literacy and emergency fund size. The study's primary strength is its:

    Answer: High external validity due to large random probability sample

    A large, randomly selected national sample provides high external validity, meaning findings can be generalized to the broader US population.